Investors in agriculture cannot enjoy the promised incentives

VietNamNet Bridge – The government--in an effort to attract investment to the agricultural production, offers a lot of incentives to the investors in the sector. However, many businesses said they cannot enjoy the incentives.

Director of a bamboo factory in a Mekong Delta’s province, said that he has become too tired of following the administrative procedures to enjoy the incentives for the investment project in agricultural production.

Under the Decree No. 61 issued in 2010, the project on training workers of the company would be propped up 50-100 percent of the total cost. The company has shown all the documents required by local finance department. However, the company has not received any support over the last year.

The state’s commitments on making investment in infrastructure to encourage farms to strengthen their investments remain on… paper. Nguyen Van Minh, Director of Huu Tin Company, said that the project on growing herbs in Khanh Hoa still has problems in electricity and water supply.

Minh said that if the State does not build infrastructure items, his enterprise would still make investment in accordance with the Ministry of Agriculture and Rural Development’s policy on cooperating among enterprises, between enterprises and producers.

However, Minh said, though the policy has been laid out, Minh and his company would still have to wait more time, because the relevant ministries are still drafting documents to submit to the government.

Farmers complained that after a lot of exertion to explain their projects on growing herbs for medicine to commercial banks, they still cannot borrow money. Some banks refuse to lend, saying the projects are unfeasible. Other banks agree to lend, but require high interest rates. Meanwhile, herb growing has been stipulated by the Decree 61 as the agricultural sector for special investment incentives.

“Agricultural producers still have to pay 20 percent per annum in interest rates to obtain loans. The sky high interest rate cannot bring any profits to investors,” Minh said.

Under the current regulations, the production of animal and aquatic medicine is also listed as the agricultural sector for special investment incentives. An enterprise may have to pay up to 300 million dong to a consultancy for every project on building GMP factory.

Under the Decree 61, every enterprise would be propped up 50 percent of the cost. However, Huynh Cong Tuan, Director of Mebipha, a trade and production company, during the construction of its GMP factory, he had to borrow money from banks at high interest rates, and that he could not enjoy any incentives stipulated by the decree.

“A lot of enterprises cannot approach the incentives due to the complicated procedures. They do not want to waste time and money to follow the procedures to enjoy preferences,” Tuan said.

Dr Nguyen Van Bay, Deputy President of the School for Management Officers in agriculture, said that localities do not have enough money for many plans, therefore, it is understandable why they do not have money to support enterprises. Meanwhile, the decree stipulates that the capital for enterprises is sourced from local budgets.

Bay also said that many enterprises do not intend to ask for investment incentives, because they have to go through too many state management agencies. At first, the proposal for incentives would be made to the local planning and investment department, After that, the department would forward the files of the enterprises to the finance and agriculture departments. After getting the nod from the two departments, the files would once again return to the planning investment department before the department submits to the chair of the province for approval.